Digital transformation is a strange term. Just about everything a telecommunications provider -- or any modern company -- does already is digital. What transformation is needed? Clearly, the term speaks to the broader integration of the many new technologies and techniques into the way telcos and service providers are structured and operate.
That means that the definition is very broad. It can be highly technical, centered in the marketing department or even philosophical. Telco Transformation asked industry insiders what they consider to be the best definition of digital transformation.
On one level, the answers produced no surprise: Everyone has a different take on the term. What is surprising is that there is comparatively little discussion of specific technologies, though some were mentioned as key enablers.
Digital transformation, at the end of the day, is what observers want it to be. What is your definition of Digital Transformation? Please share it in the comments section.
Vodafone Americas: Digitization and digitalization are not the same
Andrew Morawski, Vodafone
"At Vodafone, we view digital transformation as the complete rethinking of how an organization uses technology. This includes everything from the pursuit of new revenue streams and new business models, to the way employees across a business collaborate with each other to how a brand engages with its customers.
"Digital transformation is understanding the difference between 'digitization' and 'digitalization.' While the terms may sound similar and are sometimes used interchangeably, there are important differences between the two. To digitize is to convert pieces of analog information into a digital format, whereas digitalization involves building digital processes to optimize data, thereby moving toward a digital business. While digitization is a key first step in the transformation process, digitalization is where true digital transformation lies.
"However, digital transformation is not just a technology initiative. It should also encompass a change in culture and strategy across a business. Simply digitizing without a clear picture of how an organization will become more digital overall can lead to confusion and perhaps even a misuse of resources. True transformation is the combination of technology with the ability to envision and continuously drive change across an organization," Andrew Morawski, president and country chairman, Vodafone Americas.
BT: Digital transformation improves customer experience
Jim Sabey, BT
"Digital Transformation brings flexibility, innovation, and agility to the network. Like the cellphone, which has evolved from being a just a telephone to a powerful piece of technology, future networks will deliver the ability to easily change and adapt, giving organizations more control over a network that is more flexible. And they will do it with lower hardware costs. With SD-WAN and NFV, future networks are going to look very different from what weíre accustomed to.
"Digital transformation can be a very broad term, but what BT customers are telling me is that they are looking for digital transformation to improve customer experience, transform costs and improve operational efficiencies. Currently they have an abundance of IP connected devices in networks competing for bandwidth. Digital transformation will over time lessen the challenges of all these devices competing for bandwidth to ensure that the right applications and the right devices are working together.
"At the end of the day, digital transformation is about empowering people -- customers, businesses and employees -- to do amazing things," Jim Sabey, head of BT connect and compute sales specialists.
IHS Markit: Marrying legacy expertise with new technology is a challenge
"Technology can be used by organisations to make internal processes more efficient, create smarter, customised products and services, communicate more effectively with customers, develop new monetisation models based on valuable data and many other things. Technology underpins everything Internet companies like Facebook, Netflix and Uber do -- itís in their DNA. They need to continue to innovate with new technologies, such as AR and VR, to maintain a competitive edge.
"Most organizations, such as large car manufacturers, physical retailers, energy companies and telecoms operators, were born long before the advent of the Internet. These organizations have deep domain expertise, but technology is not as embedded into their core operations. For these types of organizations, digital transformation describes their journey towards marrying their deep domain expertise with the adoption of technology to enhance their competitive position, customer reputation, financial performance and attractiveness as an employer.
"Although digital transformation requires the adoption of new technologies, it is not solely about technology. It is mostly about being receptive to new ideas -- from inside and outside of the organization, reducing internal structural barriers to working together more effectively together and, above all, to keep sight of how customer requirements will change in the future." Julian Watson, senior principal analyst, IoT, IHS Markit.
Orange Business: Enablers are enriched connectivity, flexible IT, holistic security
Vincent Brunet, Orange Business Services.
"New digital technologies are disrupting every industry. AI, the cloud, virtualization, analytics and connected devices are all changing the very nature of how to run a business and engage with customers. Enterprises locked into a traditional 'analog' mindset will face a greater uphill battle repeating the success theyíve enjoyed in the past. The game has changed and so must the players. In that regard, digital transformation is about embracing these technologies to turn disruption into order, an order that is smarter and more efficient than what was previously in place.
"In enterprise communications, digital transformation means collaborative workspaces where people can share information and work in unison regardless of location; itís smart cities that offer guided parking and electronic payments; its asset management for monitoring in real time the state of cargo and equipment in the field; and itís connected touchpoints that offer a seamless customer experience.
"Enriched connectivity, a flexible IT infrastructure, and a holistic security approach are key enablers of almost any digital transformation project. But digital transformation is also more than just replacing old technology with new. A clearly defined digital strategy is needed that is supported by leadership and a culture that is willing to change and innovate. Besides providing the tools, service providers like Orange Business Services can work with enterprises on these strategic steps as well to ensure a successful digital transformation. Technology only becomes innovation when useful to the greatest number of people," Vincent Brunet, vice president, global marketing and communications, Orange Business Services.
Verizon: It's all about comprehensive change
"Digital transformation occurs when a company changes its products, processes, and structure to take advantage of the efficiencies and experiences made possible by today's computing and communication technologies. It extends to every aspect of a company, and if done properly, represents a fundamental change in how a company does business and serves its customers," Bryan Larish, director of technology, Verizon.
IFS: Deep and interrelated connections are key
"Digital transformation is a loosely defined term that refers to adoption of digital technologies to rapidly change, disrupt or transform businesses. Which technologies are most impactful? How can they be used to drive truly significant change?
"Our experience with our enterprise software customers and primary research we have conducted point to three distinct things as central to digital transformation. Connected people are critical to digital transformation, and that means mobile access to enterprise systems of record to increase engagement; speeding up processes; and leveraging geolocation, cameras and other handset features.
"Connected things of course refers to IoT and the bidirectional flow of information from connected devices and equipment into enterprise systems and the ability of transactions in business software to trigger activation of physical devices. The entire business must also be connected internally, which requires operational intelligence. Analytical tools let executives not only see how value is flowing through the organization but make course corrections more rapidly than their competitors. This need to rapidly change processes and entire business models while moving new technologies into the enterprise stack will require enterprise architectures that can evolve to conform to changing needs," Charles Rathmann, senior marketing communications analyst, North America, IFS.
EdgeX Foundry: Nothing is new under the sun
"In 1801, Joseph Jacquard built on the work of his contemporaries to introduced practical digitally automation to looms. Weaving -- formerly the labor-intensive work of highly trained specialists was no longer difficult -- anybody could now operate a loom to produce complex, high-quality fabrics at an incredible rate (25x!). Amazing, but only half of the story.
"The French government, in the form of Emperor Napolťon himself, saw the transformative power of Jacquardís technology and, if you will permit my generalization, open sourced it under RAND license to any and all. The result was wide scale adoption -- well over 100,000 digital looms were in operation by 1833, and a tidal wave of industrial innovation that changed the world.
"Example after example shows that a strong foundation of open [source] technology has driven wave after wave of digital transformation -- disrupting old models and in the process opening the door to unprecedented opportunity to create anew. To me, the question isnít 'What is Digital Transformation?' but how will you adapt, because we know that the next wave is already here," Philip DesAutels, senior director of IoT for The Linux Foundation and executive director for EdgeX Foundry.
IDC: Using IT to achieve business outcomes
Andy Hicks, IDC
"Digital transformation is about using IT to achieve business outcomes. Thatís it. If somebody tries to sell you a piece of technology without explaining exactly how it will improve your selected business-level KPIs, run the other way.
"Three things follow from this definition:
- "By themselves, digital services and digital channels donít equal digital transformation. You can, though, use them as the subject of transformation KPIs: some operators work toward increasing the number of services they roll out over a given period, or moving a certain percentage of customer interactions to digital channels.
- "You can digitally transform any part of your organization, including back office functions like human capital management. If IT is helping that specific function lower costs and/or help the rest of the business generate new revenue, it's digital transformation.
- "You may need help redesigning processes, reorganizing your teams, capturing the right information, and so on. Incorporate that into your purchase decisions.
"In general, digital transformation should be about lowering the opportunity cost and risk of innovation, enabling telcos to experiment with more offerings oriented to more customer segments without breaking the bank. No matter where you sit in the organization, moving fast based on solid information is the goal," Andy Hicks, research director, EMEA telecommunications and networking group, IDC.
AT&T Business: Increasing complex data flows leading to fundamental shifts
Roman Pacewicz, AT&T
"Digital transformation is the massive shift to adopt technology in all aspects of human society. Itís disrupting and enabling businesses across industries. It doesnít matter if youíre big or small, or in retail, healthcare or financial services, everyone is being impacted.
"This transformation is being driven by todayís competitive business landscape, increasing power of the Internet of Things (IoT) and rising consumer expectations. Businesses are turning to new technology to help them drive out costs, increase revenue and improve the customer experience.
"The IoT is bringing new possibilities that we never thought possible, and as a result, the flow of data is more complex than ever before. Anything and everything is being connected and itís causing fundamental shift in how we think about networking. Networking today is no longer about individual products but holistic solutions that help ensure everything is connected and securely managed from end point to end point.
"At the center of this transformation is the consumer. As a society, we have access to information from everywhere at any time to browse, shop, text and explore. This has truly redefined our behavior and set the bar for the level of personalization we all expect. As a result, businesses are being expected to do more with less and are harnessing technology to meet todayís 24/7 always-on needs," Roman Pacewicz, chief product officer, AT&T Business.
— Carl Weinschenk, Contributing Writer, Telco Transformation